Closing Bell: U.S. Stocks Rally Past Post-Election Losses as Oil Drops, Tech Rises

U.S. stocks rallied on Monday supported by a slide in oil prices as well as gains in technology shares after last week's volatility.  

The S&P 500 (SPX) was up 2.35%, while the Nasdaq-100 (NDX) jumped 3.4%. The Dow Jones Industrial Average ($DJI) was up 2.15%, and the small-cap Russell 2000 (RUT) rallied 3.15%. 

Despite the gains in the overall market and across sectors, Nvidia (NVDA) shares fell 4.5% Monday. CEO Jensen Huang admitted to an extramarital affair with a businesswoman who U.S. intelligence agencies allege is a Chinese spy; China denies the allegation. Nvidia's board is investigating. Nvidia stock is down 4% this year and is nearly 27% below its October all-time high. 

Magnificent 7 stocks were otherwise higher Monday. Tesla (TSLA) jumped more than 5%, Apple (AAPL) rose 2.4%, and Meta Platforms (META) jumped 5%. Advanced Micro Devices (AMD) rallied 13% after an upgrade and optimism that Nvidia’s trouble may benefit the competitor. 

The Nvidia Situation: Sunday Memo 

Huang admitted the affair in a Sunday internal memo, according to media reports. Huang has led Nvidia since co-founding it in 1993. The Nvidia board said it has no reason to believe national security or company secrets were compromised and expressed confidence in Huang. Tech Analyst Dan Ives said on X that "the board investigation will be key and investors are factoring in Jensen will stay on as CEO with a small chance he ultimately is removed or steps aside."  

The selloff wiped billions from Nvidia's valuation. Wall Street analysts flagged governance risk, potential CEO succession uncertainty, increased regulatory scrutiny of H200 chip exports to China, and possible headwinds for the CUDA software ecosystem. See Monaghan: Jensen Huang 'Not Going Anywhere' as NVDA Board Investigates CEO and Bull v. Bear: What's Next for NVDA as AI National Security Concerns Batter Stock?  

Stocks Claw Back Post-Election Losses 

Monday's rebound came after last week's steep AI-driven selloff, which was triggered by concerns that the Democratic sweep in the midterm elections could slow the pace of AI data center construction. Every S&P sector finished green, led by industrials up 3.8%, consumer discretionary up over 3%, and materials and tech each up 2.5%. Data center-exposed names advanced, including GE Vernova (GEV), up 7%, and Eaton (ETN), up 5%. Amazon (AMZN) rose more than 3% on the view that a data center buildout slowdown could benefit incumbent cloud giants. Michael Reinking on Headwinds Testing AI Trade, CPI & PPI Importance This Week  

Oil Price Decline Fuels Rally 

The 4% drop in WTI oil prices, to $87 per barrel in Monday afternoon trading, and a 5.6% decline in the international Brent crude benchmark, tempered inflation fears and helped fuel the broader equity rally. Despite recent missile attacks on Saudi Arabia and Strait of Hormuz targets, the price decline reflects hope in diplomatic efforts to end the Iran war now that the U.S. midterm election is past. See Are Oil Prices and Energy Markets Poised for a Sharp Pullback?  

Also see: 

Week Ahead: Inflation Data, Neocloud and Space Earnings 

Week in Review: Bulls, Bears Battle as Tech Selloff Permeates Sectors 

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